What to know about the 3 cities offering Amazon the biggest incentives to house HQ2

amazon hq2-320x213.jpgEarly next year Amazon will choose one North American city to house its second headquarters. The company welcomed city proposals to explain why Amazon should build its $5 billion campus and create some 50,000 jobs within their borders, and no less than 238 cities responded.

While some bidders are trying to attract the king of e-commerce with outlandish proposals involving name changes and oversized cacti, most are hoping to woo the company with land and tax incentives. These three cities are offering Amazon more than the rest.

1. Newark, New Jersey — $7 billion

New Jersey’s largest city has been struggling financially ever since riots tore it apart in 1967. Governor Chris Christie hopes to turn that around by making Amazon Newark’s largest tenant, and he wants to give the company $7 billion in tax credits to make it happen, Bloomberg reports.

Newark’s proposal would offset Amazon’s state and city taxes by $5 billion over 10 years. The additional $2 billion in tax breaks would come from a city property tax abatement and a wage tax waiver for Amazon employees.

This is Amazon’s most generous HQ2 bid, and with New York City only 10 miles away, it could give Amazon access to the talent it needs at an unbeatable price. Christie said he will sign the bill into law before he leaves office on January 16.

2. Irvine, California — at least $5.3 billion

Billionaire developer Donald Bren said he would fund the entire construction process for Amazon’s new headquarters — as long as the headquarters is in Irvine. Instead of spending $5 billion on construction, Amazon would just have to pay rent. Bren wrote a letter to Amazon CEO Jeff Bezos pitching the idea.


“Our company has the long-term real estate assets, capital resources and flexibility to deliver all your required workspace with lease durations of Amazon’s choosing. In essence, you would have a one-click shopping opportunity and be able to capitalize on our in-place property development rights, thus avoiding potential delays..."

While nobody can appreciate a “one-click shopping opportunity” better than Amazon, the incentives don’t stop there. In addition to Bren’s proposal, the California governor’s office is prepared to offer Amazon between $300 million and $1 billion in tax breaks over the next decade, Reuters reports. Irvine sits between San Diego and Los Angeles and has access to one of the largest pools of STEM workers in the country.

3. Philadelphia, Pennsylvania — $3 billion

In addition to touting itself as a bike-friendly, affordable, diverse and tech savvy city, Philadelphia’s bid to house Amazon’s new headquarters includes financial incentives worth a reported $2 billion over 10 years. That’s according to The Philadelphia Inquirer, which said the incentives could help nudge Amazon in the right direction given the city’s high business taxes.

In addition to mentioning its large population, educated workforce and proximity to top universities, Philadelphia’s bid highlights the city’s large supply of undeveloped land in the urban core. Specifically, the city boasts possible campus sites around the Schuylkill Yards and uCity Square developments in the western part of the city and the Navy Yard further south.

On top of city tax breaks, the state of Pennsylvania is also reportedly offering Amazon $1 billion in tax incentives to set up shop in the state. Taken together, Amazon stands to benefit from $3 billion in incentives if it chooses Philadelphia.

Honorable mentions

1. Stonecrest, Georgia

Just 45 minutes east of Atlanta, Stonecrest’s proposal shuns traditional incentives to focus on the branding opportunity of a lifetime. The Stonecrest City Council voted 4-2 to de-annex 345 acres of land to create the “City of Amazon” if it wins the bidding war.

While certainly a flattering offer, with a population of 53,000 people, Stonecrest falls short of Amazon’s request for metropolitan areas with over one million inhabitants.

2. Tucson, Arizona

As a warmup for Tucson’s proposal, the region’s economic development group Sun Corridor Inc. shipped a 21-foot saguaro cactus to Jeff Bezos. The cactus came with a message.

“We wanted to make sure Mr. Bezos and his team notice us and send a message of 'we have room for you to grow here for the long term' - nothing signifies that better than a Saguaro.”

It’s hard to ignore a 21-foot cactus, but unfortunately for Tucson, the gift was re-gifted. Amazon donated the cactus to the Desert Museum. But Tucson isn’t out of the running — Amazon said it is looking forward to reviewing their proposal.


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Topics: Industry News